Archive for March, 2008

Long time before the term web 2.0 got widely known (the term became notable after the first web 2.0 conference in 2004, organized by Tim O’Reilly of O’Reilly Media), there were plenty of social-networking web sites for horology fans. Most of these sites started in the second half of the 1990s, think of WatchUseek and TimeZone etc. These sites had (and still have) an enourmeous amount of information on all kinds of wrist watches and all kinds of brands.

However, for the sake of clarity, I will also refer to those pre-web 2.0 days as web 2.0.

It is remarkable that the watch manufacturers and watch dealers didn’t know (and sometimes still don’t know) what to do with this social-networking thing. Part of them still ignores the social-networking web sites because the grey market is a bit too present on those communities for them.

Another part of them has incorporated their own forum (like IWC) to – at least – be in control of what is going on amongst the watch community. Angelo Bonati, CEO of Panerai, some times post a message on the famous Paneristi forum, to show he (Panerai) feels connected to the Paneristi community. It is a great marketing tool for Panerai, to see what’s up amongst collectors and Panerai die-hards.

Most brands (either manufacturers or authorized dealers) still do not participate on those forums. Some of them are ‘reading’, to see what the small group of on-line collectors / adepts have to say about their brand or store, but the whole idea of communicating through these forums/portals/blogs seems to be ignored. It can be even worse though. I still get the shivers when I read on official websites (Ebel for example, see below) that all watches of their brand that are being sold through the internet, are not genuine or have at least a ‘dubious’ origin. Well, to my best knowledge, watches from the so-called ‘grey circuit’ are most of the time stamped by an official dealer. This means that these watches are perfectly genuine and that the original dealer who stamped the watch, made sure you can bring it in for warranty issues or service. Ebel seems to forbid authorized dealers to sell their Ebel watches through the internet, while the sales corners on forums offer new ones (dealer stamped) by the dozen. Or what to think about the watch sellers on watch market portal Chrono24? Authorized dealers are probably having a hard time by these restrictions. It must be frustrating to tell customers ‘no’ when these customers tell them about the percentages they can get off a watch offered through them via Chrono24 or sales corners on forums and asks whether the authorized dealer can offer him/her a similar deal. How can a brand expect an authorized dealer to compete with the grey market when these official channels aren’t allowed to use the internet in a proper manner? Some of the brands seem to use the web technology for their own website only (e.g selling brand related books, handling requests for brochures, handling requests for information on vintage watches). I think it would be nice to see that they will take it to the next level and be a true competitor to the grey markets.

At the same time, web 2.0 is used by brands (like Panerai, Doxa, IWC etc) to check whether the customer is hungry for new models. Web 2.0 is a full functional marketing tool, they only have to keep an eye on the message boards and they know what’s cooking. This information can be used to create new models (even new brands) and can be used to manage a part of the after sales service. Problems with watches are being discussed on these forums, especially when the problems are structural. Let’s take the Omega caliber 33xx for example. This movement had its share of problems since the beginning of the introduction. The problems seemed to be structural, as the Omega forums got flooded with cases of broken movements of this type. Omega COULD have used this information on forums and blogs to take control over the situation, and send out a message to the authorized dealers to pay extra attention on these watches when being sold or when they come in for a service or repair. They even could use the watch portals/forums to send out a message to the watch community that they were working on the problem (or solution) for these watches. I think that such messages would have done good to the (brand’s) image of these particular watches.

Now, for the good things of web 2.0 and horology. I am happy to see that a number of authorized dealers seem to have found a way to use this technology for their business in a positive way. Watch portals and forums like Horomundi, the Dutch Rolex Forum, TimeZone, Paneristi etc organizes so-called Get-To-Gethers (GTGs). These GTGs are meant to get to know the persons behind the posts and contributions and discuss their passion, watches. It seems to become a trend that authorized dealers attend these GTGs as well, to be able to introduce themselves and to demonstrate that they are willing to be ‘in’. I have attended several GTGs and noticed that the on-line watch community really appreciates these visits of the authorized dealers. Most of the time they will bring the latest brochures and tell the on-line watch community about the latest products of the brands that they represent. I have seen Panerai BeneLux presenting their latest inhouse movements on a GTG in Antwerp in 2005. A Dutch authorized Rolex dealer was present at the most recent GTG of the Dutch Rolex Forum in 2008. Besides getting questions from the online watch community, the dealers can gain some information on what’s on the customers mind. This way, a brand or authorized dealer can participate in the customers needs. Of course, the watch community does not represent ALL customers of a certain brand, but since every house hold seems to be online and googling, it should give a pretty good idea of what’s hot and what’s not.

Conclusion: Brands should not be scared and find a way to use the web 2.0 technology. It could probably save on some traditional marketing costs as well ;). It will probably also bring a better understanding between manufacturer and authorized dealer. Because the latter one must be getting tired to sell ‘no’ to the e-aware customer.

Of course, this post is subject to my own thoughts on the matter. I would be interested to hear other opinions on this. Perhaps I am all wrong 😉

Sometimes it’s nice to leave the beaten track of famous watch brands and take a walk into the direction of the lesser known gods. For example this creation from Meccaniche Veloci, an Italian brand. The watch is called the Quattro Valvole and is named after, and inspired by, the four valves that Ferrari used in its 308 GTS/GTB QV. In which the QV naturally stands for Quattro Valvole. Talking about horsepower in a watch!

Meccaniche Veloci, which literally means ‘mechanical speed’, was founded by two racing-enthusiasts who, when they were young, both worked as car mechanics in a garage. After setting up a watch brand together they soon decided that their first collection would be dedicated to the racing powers of the Quattro Valvole. The model has an aluminium case of 48 millimetres that is fixed with four polished titanium screws. The aluminium has been treated with Silicon Oxide to protect the material against perspiration and corrosion. The four dials represent the four valves of the motor and each dial hides an automatic timepiece, through which the Quattro Valvole can display four different time zones. However, since there are no clear distinctions between the four dials, you have to remember yourself which time zone you chose for which part of the watch. Practical? Probably not. But then again: who needs practical if you’ve got a watch like a racecar!

Last decade almost all watchmakers were (and still are) rushing to become a manufacture watchmaker. To answer to the title of this article, “To Manufacture or Not To Manufacture, That Is The Question!”, one needs to define the title ‘Manufacture’, and that is what ALL watchmakers leave in the middle!

Everybody who studied a bit of Latin, can split the word ‘Manufacture’ in two: ‘Manu’ and ‘Factura’ and knows one can translate this in: Manu is hand and Factura is to manufacture (Isn’t it funny what the English word derives from). Wikipedia gives the following definition for this word:

“Manufacturing (from Latinmanu factura, “making by hand”) is the use of tools and labor to make things for use or sale. The term may refer to a vast range of human activity, from handicraft to high tech, but is most commonly applied to industrial production, in which raw materials are transformed into finished goods on a large scale.”

By this definition almost all Swiss watchmakers can call themselves Manufacture Watchmakers. But then Wikipedia also states:
“Manufacturing is used ironically within some of these companies as a term referring solely to the marketing of the product, perhaps due to it having the alternate meaning of creating false statements. More generally, many companies use it to describe the entire process of production, all the way through from idea conception to its first use by the consumer.”

This is something that I can agree with. If we follow this definition of Manufacture, then suddenly there are NOT many watchmakers that are ‘true’ watchmakers. Companies that do not create new calibres are not watchmakers, but watch assemblers or to make a bridge to car making: Watch Tuners (Does the program ‘Pimp my Watch’ already exist?!). These watchmakers take a calibre and tune the ‘engine’ of the watch (Tissot, Raymond Weil, Rado, Baume & Mercier and many more). As you notice this discussion is soley about the ‘heart’ of the watch, the movement. That is why I only take mechanical watchmaking in to consideration in this article.

Until couple of years ago there was only ONE company in Switzerland could make Hair Spring Balances from mechanical movements (Nivarox), so there was not one compay that could make a 100% manufacture mechanical watch movement, so that was the start of when can one call it’s movement a manufacture movement?! In the watch industry there is still no clear definition. Some say a watch movement should made up by 80% of spare parts that are MANUFACTUREd by the watchmaker itself. Some say it is 90% and other says, no that is impossible and it should be 70%. If you search for a definition of manufacture on the official website of the non-profit organization Haute Horlogerie, you can find the following interesting article:

“For a long time, Manufactures were a rare breed in the watchmaking world and for one reason: after the quartz tidal wave, few companies held on to production resources that were tuned to the manufacturing of mechanical movements. Given the investments and skills this type of venture entails, few were tempted to make the move towards greater autonomy and industrial integration, in particular as there were no bottlenecks in production. How things have changed. With the return of mechanical watches, one of the main priorities has been to guarantee a continuous flow of supplies, particularly of movements. Hinging on this is brands’ credibility among an increasingly well-informed public, not to mention their all-important legitimacy at a time when more and more companies lay claim to the title of Manufacture.

Once used indiscriminately, the title of Manufacture has grown in importance and this time brands have the credentials to go with it. With an eye on the competition, numerous brands have grasped the nettle and embarked on production of their own in-house movement. Hublot has announced its calibre for next year, as has Bovet. Daniel Roth and Gérald Genta will follow suit in 2009. Omega, Panerai, Maurice Lacroix and Frédéric Constant can already pride themselves on having taken this crucial step. When Bovet took over three manufacturing firms (tourbillons, calibres and balance springs) that were grouped together under STT Holding, including the former Progress Watch, to create Dimier 1738, the brand was propelled to the rank of Manufacture. In 2002, no-one would have bet on such a transformation, except perhaps a certain Nicolas Hayek…”

Where this article stops, I want to continue, because the family Hayek had a bigger impact on the (Swiss) watch industry in last 25 year, than many grand watchmaking houses in the last hundred years. For those that are not up to date about the Hayek Family (Creaters of the Swatch brand and largest share holders of the public company Swatch Group – the biggest watchmaking group in the world), I’ll give a short summary:

In 1982, N. Hayek Sr. was attracted as a consultant to advise the SMH Group to overcome the ‘Quartz Crisis’, that crushed the mechanical watch sector: cheap and precise electronic watch movement (mostly Japanese) took the Swiss mechanical watch industy by surprise and many companies went bankrupt. In 1983 SMH group created a revolutionary watch concept: a plastic watch with a down-sized quartz movement (lesser spare parts) that took the world by storm. I don’t think I need to elaborate about the brand Swatch…. The name of group that owns over 156 Swiss watch (spare parts) factories and the following brands nowadays: Breguet, Blancpain Glashütte-Original, Léon Hatot, Jaquet-Droz, Omega, Longines, Rado, Union, Tissot, ck Calvin Klein, Certina, Mido, Hamilton, Pierre Balmain, Flik Flak and, last but certainly not least, Swatch.

The advantage of such a group is that they lifted the complete Swiss watchmaking industry and saved many ancient watch brands. The down side is that they also bought all the important spare part manufacturers (like: Nivarox, ETA, Valjoux, etc) and control the companies that are the supplier of approximately 90% of the watch industry. As you can guess, this creates monopoly inefficiencies and arrogance. For this reason many watch brands started creating their own calibers, because ETA announced to stop supply spare parts and only complete movement (read: reason to raise prices). Legendary brands like Patek Philippe and Rolex always have been independent (read: not belonging to any public listed company) and always make sure they will stay like that, they increased their research & development efforts to the maximum and took steps to create a watch movement that is almost 100% manufacture. But also many brands, like named in the article of Haute Horlogerie, are stepping up their R&D efforts. Last years many brands started to create new calibres, and if they didn’t have the knowledge in-house, they would either team-up with manufacturares or simply buy the complete company:

– Mont Blanc bought Minerva
– Audermars Piguet took shares in Renault & Papi
– Breitling bought Kelek (but not a manufacture)
– Harry Winston teams up with a different magnificant individual watchmaker every to years to create a unique Opus watch.
– Group effort: Cartier uses JLC movements (Richemont)
– Chanel will launch watches with Audermars Piguet movements during Basel 2008.
– Omega bought the co-axial eschapment from the Englishman George Daniels (BTW: Patek turned it down in the 1970s).

What I also believe many brands forget in their race to become a ‘pure’ manufacture, does the consumer really want/need it? Personally, as a purist, I love the thrive for excellence, but a bit more quality is an exponential spur in cost/price. What’s wrong with the strategy Breitling and the pre-Richemont IWC have: Their philosophy is to create a product with an excellent price-quality ratio. That means, create watches they believe are ‘Instruments for Professionals’ and using the best resources at the best price. So, they always use the Valjoux 7750 (nowadays ETA 7770 – Yes, both a Swatch Group company and ETA swallowed the legendary Valjoux), and enhance it to their personal quality specifications. And what I think even is more distinguished, is the fact that they are open about the fact that they are NOT a manufacture. Nowadays, almost every watchmaker calls oneself a manufacture, but if you confront them with the question, how many of your spare parts are actually made in-house, you never get a straight anwser!

I will not start the discussion about what is actually ‘Swiss Made’. If you are curious, have a look at the website of: The Swiss Watch Industry FH, you will be amazed what a hollow title that is!

To end this article: Should watchmakers become a true Manufacture?

To my opinion, please do, but only if you are true to your own values and more importantly to your fans, the WatchFreaks. Don’t do it to have a reason to increase prices. Don’t do it to spite the big bad wolf, The Swatch Group. Don’t worry about them, the Anti-Trust Laws in the EU are fierce and they can’t use all the movements they produce for their own watch brands (unlike they claim). Don’t be vague about it, be ethical and don’t mislead the consumer. The society is changing so rapidly, that the watchmakers should be happy that, in such a hi-tech society, people still buy old-school timekeepers. Everybody has a clock on his cell phone, in his car, on his microwave, Philips Wake-Up Light, etc.

In 1982, Peter Vacher discovered the extremely rare Hawker Hurricane R4118 during a trip through India. The British fighter plane had played an important role in the Battle of Britain. After a number of years, Vacher bought the Hurricane and in 2001 had it transported to Britain in order to restore it to its original state. As an experienced designer of classic aviation watches, watchmaking house Oris decided to help Vacher out. After eight years of restoration, the Hurricane R4118 once again regularly flies through British airspace. And naturally, a watch should be dedicated to this.

In honour of the Hurricane R4118, Oris designed the Flight Timer R4118 Limited Edition (€ 2,080.00), limited to just 4118 examples. Just like the aviation watches of the past, this model has a large vertical crown on the right-hand side with which a second time zone can be adjusted. On the left are the buttons and crown. The black dial in the steel 44-millimetre case is inspired by traditional cockpit meters. As well as these classical elements, Oris has also added the modern aspect of the R4118 Flight Timer. The watch is in fact fitted with a High-Mech Oris 674 calibre movement, an automatic timepiece with the distinctive red rotor manufactured by the company itself. Oris makes the acquisition of this limited edition watch truly complete with the unique scale model of the Hurricane R4118 and Peter Vacher’s book about the discovery and restoration of this legendary British fighter plane.

About the novelties, I had a sneak preview and saw many pictures of the newest models and IWC has outdone themselves, AGAIN! If you can’t wait untill March 17th, 2008, contact me and I will give you a short update ;). But what I did find on the website, hidden in the members area:

Six legends celebrate 140 years of IWC Schaffhausen

IWC Vintage Collection – Jubilee Edition 1868–2008
The Schaffhausen manufacturer is celebrating its anniversary with six legendary wristwatches from its past: the Portuguese, Ingenieur, Pilot’s Watch, Da Vinci, Aquatimer, Portofino – the watchmaking legends have been brought out again as attractive vintage models. For the celebration – and naturally also the great joy of all lovers and collectors of the brand.

It all started more than 140 years ago in Boston where the talented and enterprising watchmaker Florentine Ariosto Jones was looking for an opportunity to set up on his own and do things much differently and better than his colleagues in the flourishing American watch industry. The director of F. Howard Watch & Cie at that time, he had of course heard of the little country of Switzerland and its outstanding watchmakers. And he was fired up by the information that workers in the Swiss watch industry produced their watches for amazingly low wages and in the main with old machines. Wages in Switzerland were then still really low, something that may seem surprising today. And so a compelling business idea came to F. A. Jones: Why not manufacture quality watches in Switzerland under more favourable conditions, but with new and better machines, for the North American market?

His idea was conceived, planned and carried out: in New York Jones set up a sales organization with two business partners where pocket watch movements manufactured in Switzerland were to be put in cases and then sold throughout North America. The company was given a grandsounding name: International Watch Company. And Jones set off by boat to Europe with his watchmaker friend Louis Kidder. Along with a whole host of ideas, the two men also took with them machines for the mass production of parts and finished design drawings for the first Swiss manufactured watches. Initial surprise: in the watchmaking centres of western Switzerland where Jones had intended setting up his business the innovator was given the cold shoulder. The locals, who mainly produced watch parts in their homes, feared the modern machines and the concept of mass production even if it did have the indisputable advantage of consistent quality. This is where the story could have ended.But in western Switzerland Jones met Heinrich Moser, a versatile industrialist from Schaffhausen. He made the American an offer that was tempting even if not completely altruistic: he could start immediately in Schaffhausen, a small town in northern Switzerland the American had certainly never heard of until then – in industrial buildings Moser owned. What persuaded him was that a source of energy was already available there for the machines – electricity was not even a consideration then.

A hydrostation built by Moser brought the power required for the machines directly into the factory using shafts and long transmission cables. So in 1868 Jones arrived in Schaffhausen – and Schaffhausen, a long way from western Switzerland, got a watch factory. Jones was, therefore, able to realize his bold ideas. Even his principle of manufacturing highquality watches with consistent tolerances worked – and this was the beginning of the reputation now enjoyed by Schaffhausen watches throughout the world.

What had been a promising start in watchmaking with the first “Jones calibres”, named after the company’s founder, ended in difficulties commercially for Jones when America did not lower the 25 per cent war duty imposed in 1864 – contrary to what was announced. The advantage of lower Swiss wages vanished. Jones returned to Boston and the “American watch factory” passed into Swiss hands. However, the founder did leave behind his particular aspiration for sophisticated, ever-better technical solutions. Despite the initial difficulties the manufacturer became one of the most renowned producers of sturdy and durable pocket watches.And it was there right from the start at the turning point in watchmaking history when the wristwatch came into favour around 1900. The battle about how to wear a watch was decided for good by the 1930s and 1940s. The onset of this period of technical innovation brought some of the most exciting IWC watches, still much sought-after by collectors today. Some of them wrote watch history.

Six of these milestones have been brought back as vintage models from the company’s proud history into the modern day for the manufacturer’s 140th anniversary – even if it is not a “round” one. Not as copies, something that IWC has never done, but as new interpretations of good old friends. Some with ultra-modern, up-to-date automatic IWC movements which are also used in the current series-produced models. Where historical accuracy demands it they have been equipped with hand-wound pocket watch movements based on the 98-calibre, the most famous IWC calibre and the one that has been made for the longest, but they have also been expanded, incorporating some of the elements of the earliest Jones movements. And, to the extent that their predecessors had not already appeared in the IWC extra-large format, the case of some of the vintage models has increased in size on its journey through time, which on first sight makes them distinguishable from the originals. But in this way they have also taken on completely new watch personalities. They illustrate how, for example, a 1955 Ingenieur would have looked if its case had had a 42.5 mm diameter rather than 37.5 mm.The six watches, which are available in unlimited numbers in stainless steel with a black dial and in limited numbers in platinum with a silverplated dial, are more than just a “Best of” the wristwatch era at IWC. Each one of them essentially embodies the founding legends of the manufacturer’s current watch families. The first 140 vintage watches in platinum have, though, in a way already been reserved: as a special offer they are available as a unique numbered set in an ornate leather case.

To be continued 17 March 2008.

For images (only to be used on http://www.iwc.ch), please login on the official IWC website, visit the members section, go to the Collector’s Forum and select “Articles”. The first article presented there will display these six magnificant watches plus the re-editions! We will do our best to post the pictures as soon as they are released.

I won’t say ‘why you shouldn’t collect vintage Rolex watches’, because this post just reflects my opinion on collecting vintage Rolex watches. I am a huge fan of Rolex watches and have my share of them. My collection also includes a vintage ref.1600 Rolex Date-Just dating 1969 featuring a beautiful pie-pan’ish dial. A few years a go (+/- 2003), if you had 2500 Euro to spend, you could either choose a slightly used GMT-Master (II) or a vintage ref.1675 GMT-Master in good condition. Including the original box, if you were lucky. In the same period, you could have your vintage Submariner for a few hundreds extra.

Since then, Rolex forums, portals and fan sites have been popping up like mushrooms, and boosted the vintage Rolex market. Even vintage Rolex watches in bad (or even worse) condition do not stay with the seller for a long time. Prices went up like crazy. A vintage ref.1675 in a so-so condition would easily fetch 4000 Euro. A vintage red printed Submariner? 8000 Euro. A ref.1665 Sea-Dweller from the late 1970s? 15.000 Euro! And I left out the double red printing on the last one, add another 10.000 Euro for the Sea-Dwellers with the red lettering.

That’s how the market works I guess. And if you like vintage Rolex watches and have the money for it, buy now and don’t wait another 5 years. New Rolex watches also see their annual price increases, but not with the percentages of vintage ones.

The reason why I do not collect vintage Rolex watches is not that I don’t like them. I really do like the domed crystals, non-glossy dials and yellowed tritium hands and hour markers. The main reason is that I don’t think they are worth the extra money over a modern Rolex watch. Take Omega’s Speedmaster Professional for example, the vintage models with movement caliber 321 and the applied metal Omega logo from the 1960s is about as expensive as a brand new Speedmaster Professional model. Perhaps even a bit more expensive if the vintage watch is in very good condition. The vintage Speedmaster (pre-)Professional is crafted more nicely than the new ones, with the column wheel chronograph movement and the dial with the nice applied metal logo. Except for the bracelet, you could say that the old watch is even better in terms of used materials and movement. So get one while you can, before these watches get as hyped as the vintage Rolex models. Which I actually doubt that will happen, because Rolex is still the brand for the masses. Even if you aren’t a watch freak or adept and can spare some money, a vintage Rolex is the way to go.

Undoubted, a modern Rolex watch is better than a vintage Rolex watch, in terms of quality of used materials and because of the movement. As for beauty, it’s a different issue. As I wrote before, I like the vintage Rolex watches, but the hype made the fun go away. A number of people seem to buy them to be able to show off to other vintage collectors, not for their own pleasure. It also occurred to me that most of the current vintage buyers are mostly focused on the optical aspects of a Rolex and do not care for its condition of the mechanical movement. That’s like buying an old-timer with a perfect paint job without popping the hood.

Vintage Rolex watches in a good condition are expensive due to the demand, but asking (or paying!) crazy prices for watches in such a condition that the buyer should be lucky that it runs at all, is insane.
I would be only interested in buying a vintage Rolex watch when it was in superb condition. Optical as well as technical, otherwise it is just an old watch to me. However, instead of paying 15.000 Euro for a vintage ref. 1665 Rolex Sea-Dweller, it also brings me – for example – an Audemars Piguet Royal Oak Jumbo ref.15200ST that is a few years old AND a brand new Rolex Sea-Dweller. Or, the summum of watch making, a Patek Philippe. In other words, if I would be in the market to spend 15.000 Euro on a wrist watch, it surely wouldn’t be a vintage Rolex.